Oops, We Missed A Day with Special Guest Steve Greenfield

Paul J Daly: 0:01

All right, here we are day two of ASOTU CON. Day one was out of control all the comments the conversations that are having happening is everything I think we wanted it to be. So we have seen Greenfield up here with

‍Steve Greenfield: 0:13

Hold on, hold on. Let's ask these guys. How many hours of sleep did you get last night?

Kyle Mountsier: 0:18

Four hours and 38 minutes I think was my walk crush

Paul J Daly: 0:21

it at six hours. I feel amazing. Shot.

Steve Greenfield: 0:23

I really not get six hours.

Paul J Daly: 0:26

You realize you don't know. So

Steve Greenfield: 0:28

here got six hours, you didn't see that I have a baby with a little baby. I have a little baby. You're looking after your health. You look great.

Unknown: 0:36

I feel great.

Kyle Mountsier: 0:37

My beard has less gray than mine. You

Steve Greenfield: 0:39

can't see him up close. But he looks really great. So

Paul J Daly: 0:41

Kyle's been telling this story that what was it your wife showed your picture? Was it six years ago? Three, three years ago, right? When you decide it's even worse feels like six years. Three years ago when Kyle decided to leave the store. Right? Come and come and work. Full full brown

Kyle Mountsier: 0:57

beard around. It's great.

Steve Greenfield: 1:00

To be like speckled hot soon, maybe like your hearts are gonna reflect a beard color.

Paul J Daly: 1:04

We're gonna lean into it. All right. Okay. Well, thank you so much for joining us to the podcast. We if we're in front of a live breakfast audience today, there's probably 100 and some Yeah, how you're feeling today.

Kyle Mountsier: 1:18

The early crew give it up for the early early crew.

Paul J Daly: 1:22

The Maryland auto dealers association is just about 100 yards away from us having their annual meeting. We stopped

Kyle Mountsier: 1:28

100 people in a tiny room back there. Yeah, really? Yeah, it's real tight.

Paul J Daly: 1:34

And then another breakout where we had less people but we just did a parenting session, which was amazing. That's really cool. Yeah, we got we have one person who's excited. One person parent a Whoo. That's perfect. And so

Steve Greenfield: 1:46

there's just a lot of I don't even know what is a parenting session. What is that? It's pretty

Paul J Daly: 1:50

self explanatory.

Steve Greenfield: 1:53

I'm kind of scared to this was basically

Paul J Daly: 1:55

how to be a better parent while also being a busy professional. Wow, that's great. It was really cool. The dailies brought their family therapist of the decade and literally Oh, okay. Yeah. For your therapist to Work Day. Shame. I thought it was a lot of fun. My cats. Yes. Lots of cats are cat parent. Oh, there's their therapy cat?

Kyle Mountsier: 2:16

I don't know. But either way, go ahead. Yes, Steve, I want to get get into it. I've watched you kind of be almost all over the world recently. told me about it. Yeah, you're like, on a been on a plane half a half the first half of the year. But what I what I'd love to hear from you, you know, we always talk about like the relevant news of the day on this podcast. But I'm sure that the conversations that you get to have, because you've been in a couple other countries, even recently, are maybe maybe all the same or a little bit different than what you're hearing in the US. What's been some of the themes, or one or two of the themes that you've experienced in your travels this year so far? Yeah,

Steve Greenfield: 2:59

it's a good question. So to put in perspective, two weeks ago, I was in Qatar. And here you've got a country that oil and gas was discovered in 75 years ago. 1939. And now 300,000. Qatari is live in that country 300,000 In our country, and they have 15% of all the oil and gas on the face of the earth. Oh my goodness, these per capita are the most affluent people in the world. But when you fly in like it's all desert, it's all desert. It's so inhospitable. So it's very interesting juxtaposition. And ironically, I was there for a mobility conference where they're pushing autonomous and electrification. And it didn't take me 24 hours. I'm not the smartest guy in the world, but I'm like, why on earth you're sitting on like, 15% of all the oil in the world. Do you want to give a crap? It's a threat to

Paul J Daly: 3:48

you. I was gonna say, like, are they like, look grumpy

Steve Greenfield: 3:51

when you get there? Exactly. Right. So very interesting dynamics over there. But it's sort of like in the world where you've got all the money you could ever spend, you need something to differentiate. So they have the world's best airport in Qatar, right? And this is the world in the Middle East, where if you didn't get a single digit license plate for your Lamborghini, the license plate costs $10 million, literally, right? So you need status symbols just to stand out. So you're

Paul J Daly: 4:17

saying you can buy a $10 million license plate because it's got one through 10? Or one through nine? That's correct.

Steve Greenfield: 4:23

And it's just like, if your neighbors can could own 100 Lamborghinis. What's the one way you can stand out? You need to own something that nobody else does scarcity. one through nine, only nine people exactly right. That's one and then you know, I was in Amsterdam. Ironically, I was presenting in Amsterdam on Tuesday at noon, and I was here at 130 in the morning. That same day, I think that's when

Paul J Daly: 4:47

I saw that. I was wondering, like, how does that work? Steve's coming to work out like he has a

Steve Greenfield: 4:52

room and I connected through Atlanta. But the interesting thing about Amsterdam to juxtapose is like one of the most livable walkable countries in cities on the face of the earth, very green. And at 430, I was walking out to get the night before I was walking out to get something to eat. And I mean, you really have to be careful because of the bike paths. Everyone by everyone's biking, yeah. And at 430, everybody's out of work. So it's like traffic jams and bites on these bike paths, which is really interesting to see. But, you know, they're the the, quote, unquote, 15 minute city where people live within 15 minutes of everything they need. And you can either walk or bike to the grocery store, to the movie theater, to the shopping malls, their place of work, and the parks is very, very interesting to see. Right. So they have the density to be able to do that and the climate. But I mean, to your point, juxtaposing these interesting places around the world, the other observation I'll have is, you know, this level five autonomy, like that may never happen in the US with the cruisers and the way most in countries that you where they have top down control China, for example, or the Middle East, where you've got a monarchy, you controls the whole country. I mean, they can just cram through level five autonomy. I mean, it's going to happen, you're going to go to some of these countries and you won't be able to drive, no one will be driving, no one will be driving because it will be mandated. I mean, I think there's little doubt that if a country was able to switch to 100%, autonomy, there will be fewer, fewer deaths. Sure, you are talking to each other. But in the US where we are, I mean, we're never going to get there. But these countries that can cram down the decision from a top down, will binary flip, like kinda like Norway has with EVs will flip over to autonomous vehicles, and then you'll go there, and you'll be like, there isn't a car with a driver. And I think that'll all happen within the next five or 10 years in some of these countries. Wow.

Paul J Daly: 6:44

Five to 10 years. Yes. No driver, it

Steve Greenfield: 6:47

is nuts. But I don't think anytime I don't know how long I'm going to be on this earth. But I mean, no time in my lifetime. Will we have level five autonomy in the US? It'd be like these edge cases where you can get into a Waymo in Phoenix, but only when the weather's perfect. Yes. That's where you guys live? Six months out of the year. Yeah. You know where I live? He's like, don't get me. Where are you? Six, four to four to six months of the year. Yeah. No unsalted variables are gonna crust over the lenses on the Tesla cameras. Yeah. So you can't have full autonomy in you know, where you live is like the same as me, you might get 10 months out of the year, but we get wicked thunderstorm. Absolutely. And during a thunderstorm, by the way, 5g doesn't work. So the conductivity to the cloud isn't going to work in a car. And definitely like all those lenses get fogged up. So the cars are basically going to just turn off, go to the side of the road and park and say, Hey, Kyle take over. Because I don't want to risk you. That's

Kyle Mountsier: 7:41

unbelievable, just things that you don't think about or that aren't being talked about, especially in the landscape of like in the political landscape, where the idealism of these things sometimes overrides the reality of it, the reality of it is so I want to go back to like the Qatar Evie thing is that like, is there interest in that just because they know that they can still ship the oil everywhere else around the world. And for them, it's a status symbol to have all EVs in the country, basically,

Steve Greenfield: 8:11

my sense is, so they have almost every single passenger bus, all electrified already. And the next step will be to get every passenger vehicle electrified. As you can imagine, the EVS aren't manufactured there. So they're coming from China. So all these vehicles coming in are Chinese vehicles, right? China is a big exporter of cars in general and EVS specifically. And I think it's gonna be bragging rights, like the single digit Lamborghini license plate, it's like if they can go to 100% electrification and 100% autonomy, tell the world about the first country in the world that does. So it's the same reason that they spent $3 billion on an airport to have the best airport in the world, which is like mind blowing, when you go into the airport, I saw a really amazing, but you know, they need bragging rights. They've got all the money in the world, so they can spend an unlimited amount of money on anything they want to achieve. So it's achieving things first, and then having the bragging rights in the Middle East and globally to say, we got there first. That's, that's all I think it is. But yeah, they have to have a high degree of confidence that countries like us, and other countries will keep the oil until it's all gone.

Kyle Mountsier: 9:19

And they will. Alright, so that's a much more broad stroke. But you also spend a lot of time on the ground boots on ground with dealers, especially in the US, considering like, what's top of mind we kind of asked the question during the podcast yesterday, what are people asking about? And I think someone said, what did the salespeople know can can can have consumer actually get educated at a dealership and then the other one was, what's my monthly payment? Right? Are you experiencing those same things? Or is there are there other things that you're hearing dealers talk about as like the boots on the ground this month right now?

Steve Greenfield: 9:51

Yeah, I think we were hearing all of it real time on the stage. Thanks to you guys. Bringing dealers up here that are like you know, very forward thinking. I think a lot of is around what front end grow Is there going to be on EVs versus ice vehicles? What I'm challenged with on the we've heard this yet, but if you've got a salesperson, and a consumer comes in, even with the intent to buy an Eevee, and I size up this consumer, and like, I want to make a lot less gross on that, Evie than an ice car, why wouldn't the salesperson do their best to switch flip them over to a nice car. So that's gonna get worse this year. If you get more supply or just fixed demand, I mean margins on the front end of EVs are gonna sometimes zero or they're gonna be negative, and they're gonna be well into negative like a dealer is gonna literally look and say, oh my god, I gotta I gotta help the OEM now move these TVs. I gotta take a loss on every single car, and then somebody who's getting a commission is gonna be like, I get no commission on that car. Why would I encourage the consumer to buy the Eevee? I'm gonna flip them over to Ice Vehicle. Yeah, there will be 2022

Kyle Mountsier: 10:51

Ice Vehicle, right? Yes. Right used car. Yeah, margin compression, all that type of stuff. So yeah, so unintentionally, will continue to leave EVs on the lot, right? Yeah.

Steve Greenfield: 11:01

And then you're the OEM has no choice but to come in over top with more incentives and more incentive. So where are you saw Ford lose$5 billion in their Evie division last year, the blood loss on these Eevee divisions will be really bad, really, really bad. Like, it's already bad enough, you hear for losing 30 or 40 grand per car sold in their Eevee divisions, it's gonna get far worse. And then you know, the CEOs of these companies are gonna be like, the Wall Street analysts are gonna be like, well, how much longer are you going to spend money on these these like, atrocious losses in your Eevee operations? Right? So I do believe EVs get far too much stage time at conferences in general. But it's gonna get really, really ugly here. I think I don't know the right way out of this.

Paul J Daly: 11:42

It feels like speed wobbles. You know, like you watch a skateboarder go down a fast hill and then all of a sudden, you see they cracked this way that overcorrect in the overcorrect. This feels like just the next in the over corrections. We're now like, there was a story this week we talked about where Nissan is asking dealers to help move the inventory. They're like, we'd have no more money to put into, right, like we need you to help move it. And the consumer from the consumers perspective, you see that EVs are getting cheaper, right? We were talking about my sister was like, I have$300 a month. Here's the need, here's my life. And I was like Ionic five, right? However, like that's not a realistic, profitable, no like mentality. But consumers like oh, you know what, maybe EVs are affordable. So adoption that seems to speed up for a bit of time, but it's still not profitable, you

Steve Greenfield: 12:25

can just do sales artificially, we know that most consumers is dealers will tell you or payment shoppers. And you know, if you give me a 299 a month on something with a little down, I'm like, I'm all in, like,

Paul J Daly: 12:34

I don't really care what it is at 18 month commitment, if I don't like it, I only have it for 18 months, right?

Steve Greenfield: 12:39

And you're not taking the residual risk. So even if Evie prices in two to three years are like in the toilet, that I'm not taking the residual risk. So there can be all these cars coming back. And the captive finance companies are gonna be taking massive losses in three years. Right. So it's a very interesting dynamic.

Paul J Daly: 12:53

I'm thinking about the speed wobbles. That's, that's my mental model.

Kyle Mountsier: 12:55

Well, yeah, and not just that, but you're like, we also may not see the impact of this for two or three years. Right, right, which is the crazy thing. We're actually it's a very similar thing that's happening right now with lease returns and the impact that we aren't seeing from from early COVID. And the lack of use, right? So it's a similar trailing return thing. Yeah, you

Steve Greenfield: 13:18

have too many EVs if they keep innovating, which they are, and the new generation of EVs come out and they have more range, and can you charge faster,

Kyle Mountsier: 13:27

and we have technology figured out the pace of trade cycle is gonna want these

Steve Greenfield: 13:30

three year old EVs, right? So it's gonna even hurt more in terms of the same

Kyle Mountsier: 13:34

thing is nobody wants the one year old two year old iPhone. Right? Right. It's that same type of innovation. That's that's much quicker in the r&d cycle for these OEMs. And so that's dangerous for, you know, people not wanting these things, right. Wow. Well,

Paul J Daly: 13:48

we are 10 minutes to the start. Whoa, day two. So roll the outro music if you would. There. It is, like that power. Steven, thank you so much for being a part of this event. for always being generous with your time and your insights and your travel plans we live vicariously through.

Steve Greenfield: 14:04

Well, kudos to you guys. Great conference. Let's have a round of applause to these students.

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